Management Cps Chapter 7 Vocabulary

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Balance of payments

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An international summary statement of all economic and financial transactions between one country and the rest of the world for one year.

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Bilateral contract

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Involves an exchange of promises. The offer is accepted by a return promise from the offeree. Unless the offer provides that acceptance is to be actual performance, a promise to perform will usually suffice as an acceptance.

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Capital assets

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The US Internal Revenue Code defines this as any property a taxpayer holds that is not listed in Section 1221, which includes inventory, accounts receivable, and depreciable property or real estate used in a business.

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Capital lease

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A long-term, non-cancelable lease and, although legally a rental agreement, is in substance an installment purchase by the lessee. Generally accepted accounting principles require that substance (as if the lessee were the owner) be recorded.

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Contract

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For an agreement to be legally enforceable, five elements must be present: legality, mutuality of agreement, consideration, capacity of parties, and form required by law

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Currency

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Consists of coins and paper money issued by the federal government.

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Embargo

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A unique form of quota, during which no units of a particular commodity can be imported or, in some cases, exported

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FICA

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Must be withheld from each employee's pay. Employers withhold a specific percentage of each employee's earnings until a maximum limit is reached. The employer must also pay a tax at the same rate as the employee. Also known as Social Security tax

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Foreign exchange

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Refers to the monetary means for making payments in currencies other than a country's own currency.

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International finance

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The movement of monies from one country to another.

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International trade

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Encompasses economic concepts, the political economy, and the sociocultural climate of different nations.

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Lease

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A contract that outlines the conditions of how property owners may _____ or rent property to others. Most states have specific statutes regulating the landlord-tenant relationship.

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Licensing agreement

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Often called a franchise, it is when one party (the licensor or franchisor) allows or licenses another party (the licensee or franchisee) to use the licensor's trade name, trademarks, commercial symbols, copyrights, and other property in the distribution and selling of goods and services.

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Long-term capital gains or losses

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Result from dispositions of capital assets held for more than one year. One often off-sets the other.

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Operating lease

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Usually short-term and gives the lessee the right to use the asset for a given time, but the lessor retains ownership and all its risks and rewards.

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Quasi-contract

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Not a contract in the true sense because there is no mutual assent, but the law imposes an obligation under some circumstances where there is no agreement between parties to prevent an injustice from occurring. Frequently, this is found to exist to prevent unjust enrichment of a party.

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Quota

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Another form of commercial policy to restrict the amount of international trade. The two types are import ______ and tariff ________.

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Short-term capital gains or losses

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Result from dispositions of capital assets held for one year or less.

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Tariffs

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Taxes levied on commodities as they move through a custom boundary.

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Uniform Commercial Code (UCC)

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Promotes greater uniformity in interstate commercial transactions; developed as a model law for state consideration and enactment, and today, it has been adopted by every state. It applies to a wide range of business applications, such as the sale of goods (contracts for the sale of goods) commercial paper, and security interests in personal property.

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Unilateral contract

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One in which the offer is accepted by performance of the requested act. In a unilateral contract the offer invites acceptance only by performance of the requested act, not by a return promise.

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Voucher

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A document that is used to authorize payment of a liability

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Voucher system

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Used to obtain the maximum amount of internal control over cash disbursements, purchasing, and receiving and requires that a voucher be prepared and verified prior to making any payments.